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Dell Computer Corporation (DELL) Message Board

  • crpshooter crpshooter Jan 16, 1998 12:11 PM Flag

    why is dell weak today....?

    Just bought Dell yesterday...... the NASDAQ is way up today yet DELL is only up $1.oo! what gives? In the past anytime the NASDAQ was up over 15 points Dell would be up at least $3--- Am I just expecting too much or what? I'm not getting in too late in the game am I?

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    • To answer your question, yes, in my opinion you did get in too late. BUT, only if you were looking to make a few bucks in the next few weeks and then bolt. I think you can see by looking at DELL's chart that volume is drying up, and this latest run-up may have seen its peak.

      Volume has been over 10 million during this past week, and today it will be hard pressed to top 5 million. Half the volume, half the rise.

      DELL looks good for earnings this month. Look for DELL to punch through the 95 barrier, if that happens before earnings you could see a new 52-week high ($103 7/8).

    • Check a chart of NASDAQ, DJI, SP500, for the last week or two
      against Dell. Dell has been steadily rising while the indexes
      have been treading water.

      My guess would be some large institutional investors
      establishing a position in the stock. Those need to buy
      in over a period of weeks and so will tend to keep the
      stock moving slowly upward in defiance of index moves in
      the opposite direction.

      They are probably some that bailed out since October to lock
      in 200% profits for the previous year and want to get back
      in now before they miss the boat for this year. A good
      February report combined with a stock split announcement
      will send this stock up 50% in a single quarter, easily.
      Institutional investors must begin now to re-establish
      last year's position or they won't have time to get in
      before the next earnings report.

      This report is a key one as it will reveal two important
      things:

      1)how much did Asia effect the company. Dell says it had
      a net positive effect.

      2)how much is their new > $1B/year Internet storefront effecting
      revenue and profit growth ?

      There's a good chance of a big surprise factor in the
      positive direction. Run through the numbers of EPS estimates
      and P/E and see how much this stock will be worth if it
      exceeds 1998 estimates and maintains a P/E of 40. Then run it
      again with a P/E of 49 (which it held last year for almost
      an entire quarter, until October Asian Flu). The P/E range
      of this stock has been 25 - 50 for the past 5 years. Worst
      case, misses estimates by 10%, and P/E falls back to 5 year
      low we still have a share price of $75, which is, I believe,
      the very worst case scenario, which is why it hit a low of
      $72 on the worst day of the October Asian Flu panic. The
      market just couldn't see this stock ever dropping below
      $75 for long and it has a tremdously large upside at that
      price.




    • To answer your question, yes, in my opinion you did get in too late. BUT, only if you were looking to make a few bucks in the next few weeks and then bolt. I think you can see by looking at DELL's chart that volume is drying up, and this latest run-up may have seen its peak.

      Volume has been over 10 million during this past week, and today it will be hard pressed to top 5 million. Half the volume, half the rise.

 

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